Tax Blawg

Introduction

Welcome toTaxBlawg, a resource for news and analysis of current legal issues facing tax practitioners. Although blawg.com identifies nearly 1,400 active “blawgs,” including 20+ blawgs related to taxation and estate planning, the needs of tax professionals have received surprisingly little attention. TheWall Street Journal's Tax Bloggives “tips and advice for filers,” and Paul Caron’s legendaryTaxProf Blog is an excellent clearinghouse for academic and policy-oriented news. Yet, tax practitioners still lack a dedicated resource to call their own. For those intrepid souls, we offerTaxBlawg, a forum of tax talk for tax pros.

Chamberlain Hrdlicka Blawgs

David J. Shakow is counsel in the Philadelphia office of Chamberlain, Hrdlicka, White, Williams & Aughtry and is professor emeritus at the University of Pennsylvania Law School.

The Supreme Court's decision in Home Concrete raises new questions about the deference to be given to administrative pronouncements that conflict with prior judicial decisions. Unfortunately, the opinions of a divided Court leave practitioners to puzzle over the boundaries of its decision.

This article originally appeared in Tax Notes. Copyright 2012 David J. Shakow.

Following the Supreme Court’s decision in Mayo Foundation v. United States, in which the Court ruled that tax regulations receive deference from courts under the Chevron doctrine that applies to non-tax regulations, many commentators acknowledged the decision’s anticipated impact on disputes about the validity of tax regulations. The new standard gives the IRS much wider latitude in issuing regulations that fill gaps caused by statutory ambiguities. In our prior discussions of the decision, we speculated:

The IRS may be wise to keep in mind that neither it, nor the courts ...

The Seventh Circuit handed the government a victory yesterday, deciding in Beard v. Comm’r that a taxpayer’s overstatement of basis can result in an omission of income under Code section 6501(e), thereby extending to six years the statute of limitations for the IRS to make an assessment, rather than the usual three.

Background

Beard involved an individual taxpayer who had engaged in a variant of the so-called “Son-of-BOSS” transaction in which the taxpayer sold short a position in a financial asset and contributed to a partnership both the proceeds of and the debt created by ...

People are always asking how long the IRS can wait from the time you file your return to conduct an audit of your income and expenses. The simple, most definitive answer is "it all depends," so let's take a look at the rules.

The time in which the IRS must conduct its audit is governed by what's known as a "statute of limitations." That statute doesn't begin to run until you actually file a return. Once you file a return, the IRS has three years from the time the return was filed (or, April 15th of the year in which you file, if it is filed early) to conduct and complete an audit. That means that the IRS has to select your return for examination, conduct whatever level of audit it is going to perform, and either get an agreement from you to an additional amount of tax or a refund, secure an extension of limitations period from you, or issue you a document known as a "Notice of Deficiency" (indicating what it has determined your correct tax liability to be and giving you ninety days to go the United States Tax Court). If it fails to complete one of these actions within three years, in most situations the proverbial “ballgame” is over and it will be too late for the IRS to assert an additional tax liability for that year. The filing of an amended return does not extend the period in which an audit must take place. As you might expect, however, there are exceptions.